Taxation in the Energy and Mining Sector

Our team regularly advises companies in the power, mining and energy sector regarding its various taxation matters.For information regarding taxes and levies applicable to the Mineral sector click here.

Advice on Indirect taxes Sales tax: VAT is called sales tax in Pakistan and is governed under the Sales Tax Act 1990 (the Sales Tax Act). All supplies made in the course of any taxable activity and all goods imported into Pakistan are subject to sales tax (except those listed in Schedule 6 of the Sales Tax Act). E&P companies are required to be registered under the Sales Tax Act because the supply of E&P products attracts sales tax.

Import duties: Customs duty on the import of plant, machinery, equipment and other accessories made by E&P companies, their contractors, subcontractors and service companies is governed by SRO.678 (1)/2004 dated 7 August 2004 (SRO) and issued under Section 19 of the Customs Act.

Exemptions from customs duty for machinery, equipment, materials, specialized vehicles or vessels, pickups (four-wheel drive), helicopters, aircraft, accessories, spares, chemicals and consumables not manufactured locally that are imported by E&P companies, their contractors, subcontractors or service companies, in excess of 5% by value

Other customs duty concessions which are available exclusively for E&P companies that hold permits, licenses, leases, PSCs or PSAs and that enter into supplemental agreements with the Government. Moreover, the exemption under the SRO is available in respect of the specified goods subject to satisfying conditions specified in the notification.

Federal Excise duty on Minerals/related products: Excise duty is a single-stage duty levied at varied rates on specified goods produced or manufactured in Pakistan, imported into Pakistan, produced or manufactured in non-tariff areas and brought to tariff areas for sale or consumption, and specified services provided or rendered in Pakistan.

Stamp duty(s) required for written deeds, will or other formal legal document for transfer of property or mine leases etc.

Matters concerning Customs, Sales Tax, Excise Duties and Income Tax are dealt with for a variety of corporate clients and advice is provided to them productively in these fields in order to make their businesses more tax efficient. In addition to Tax Planning, we are able to supervise books of accounts, preparation/submission of Sales Tax Returns, preparation/submission of Income Tax Returns/Statement, representation of cases for assessment before Taxation Authorities, appearance before Appellate Forums, NTN Registration and Sales Tax Registration.

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